"We have done our analysis and we have decided not to go after it," said Pawan Goenka, president, (automotive and farm equipment sectors) Mahindra & Mahindra (M&M). He, however, said not participating in the race to acquire SIL does not mean M&M would never look at the option in the future.

"As of now we are not interested, but that does not mean we will never look at it. We have various things to do at Mahindra & Mahindra," he said without elaborating.

In May, M&M had said it would examine the opportunity of acquiring a stake in the government-owned SIL and would announce a final decision within 45 days.

The government had then cleared the sale of loss-making Scooters India. It would have been the first strategic sale of a state-owned company in eight years.

The first took place in 2003-04, when the National Democratic Alliance government under Atal Bihari Vajpayee sold IBP to Indian Oil, another PSU, for Rs 350 crore.

The sale would have been undertaken through the Department of Disinvestment and “would help arrest drain of public money and ensure economic growth of the company and its employees”, a government statement had said.

A number of companies are expected to bid as Scooters India owns 150 acres land, worth more than its accumulated loss of Rs 826 crore. The heavy industries ministry had earlier indicated that competitive bids would be called. The government owns 95.38 per cent in the company, whose market capitalisation is Rs 165 crore.

Rajkot-based Atul Auto on Thursday had expressed interest in buying the PSU.

Last year, the government had approved sale of 74 per cent stake. The then heavy industries minister, Vilasrao Deshmukh, had said Mahindra & Mahindra was interested in buying the company. However, the process was stalled due to opposition from other ministries.

Scooters India mainly manufactures three-wheelers. It has been incurring operational losses since 2002-03. By 2008-09, its net worth was eroded and it was declared sick in March 2009.

In 2009-10, its net loss was Rs 22 crore. The losses had been mainly on account of inherent inefficiency and low productivity compared to other players in the highly-competitive three-wheeler market, said the government statement.

Scooters India has a 2.7 per cent share of the domestic three-wheeler market. The company sold 14,036 three-wheelers last financial year, an increase of 20 per cent over the 11,720 units it sold in 2009-20.

The company, incorporated in 1972, started commercial production of scooters under the brand name of Vijai Super for the domestic market and Lambretta for the overseas market. Later, it ventured into three-wheelers with Vikram. It stopped producing two-wheelers in 1997.